Stocks edged higher Tuesday as investors weighed rising energy prices against a cautious Federal Reserve.
The Dow Jones finished at 46,993, up 47 points, or 0.1%, while the S&P 500 added 17 points, closing at 6,716. The Nasdaq led the way with a 0.5% gain, finishing at 22,480, and the Russell 2000 rose 0.7% to 2,520.
Energy markets were in focus, with Brent crude jumping to around $103.50 a barrel, resuming a conflict-driven rally after Monday’s pullback. West Texas Intermediate climbed back above $95, while US diesel topped $5 a gallon for the first time since December 2022, pressured by supply disruptions from the Gulf.
Investors are keeping a close eye on the ongoing Middle East tensions, which show no signs of easing. At the same time, the Federal Reserve kicked off its two-day policy meeting Tuesday, with Chair Jerome Powell set to speak on Wednesday. Expectations for near-term rate cuts have cooled, and the market is now pricing in almost a 100% chance that rates will hold steady, according to CME FedWatch.
Earnings watchers are gearing up for reports after the bell from lululemon, Okta, and Docusign, which could set the tone for trading in the days ahead.
All in all, Tuesday was a cautious but slightly upbeat session, with investors balancing geopolitical risk, energy volatility, and the Fed’s steady hand.
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American Airlines Group Inc (NASDAQ:AAL, XETRA:A1G) raised its first-quarter revenue growth outlook to above 10% year-over-year, citing stronger-than-expected travel demand despite higher fuel costs.
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Delta Air Lines Inc (NYSE:DAL) also lifted its first-quarter revenue guidance, signaling resilient air travel demand even as fuel prices rise.
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Tencent Music posted strong fourth-quarter revenue growth driven by its online music business, but a change in user metric disclosures sent its shares sharply lower.
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Getty Images shares surged after a strong revenue beat in the fourth quarter offset weaker earnings and a softer outlook.
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Candel Therapeutics Inc (NASDAQ:CADL) reported updated clinical data showing extended survival outcomes in a Phase 2a lung cancer trial for its CAN-2409 therapy.
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New Era Energy & Digital (NASDAQ:NUAI) appointed Ted Warner as CFO, adding an experienced capital markets executive to support its growth strategy.
Corporate earnings expectations have remained resilient despite geopolitical tensions in the Middle East, a fact that is continuing to support equity markets, according to Jeffrey Buchbinder, chief equity strategist for LPL Financial.
Buchbinder highlighted that heavy investment in artificial intelligence is driving strong growth in the technology sector, which accounted for more than half of S&P 500 earnings growth last quarter and is expected to play an even larger role in the current period.
Buchbinder also pointed to fiscal stimulus from the One Big Beautiful Bill Act as an additional tailwind for corporate profits. He noted that, unlike the usual trend where earnings fall short of early-year estimates, projections have shown unusual strength both last year and so far for 2026 and 2027.
“Bottom line, earnings momentum is strong and is likely to remain so despite the war in Iran,” the strategist wrote.
“Given the drivers of U.S. economic growth remain in place and the U.S. is energy independent, double-digit earnings growth in 2026 remains likely and will likely put a strong foundation underneath the stock market until the geopolitical threat eases, helping to mitigate downside risk.”
“A rebound in US pending home sales, deteriorating NY Fed general business activity index and plummeting German economic sentiment amid the Middle East conflict had little impact on financial markets ahead of Wednesday’s Fed policy meeting and Powell’s remarks,” noted Axel Rudolph, chief technical analyst at IG.
“These will be closely watched for clues as to future policy, especially since the Reserve Bank of Australia hiked rates for a second time in as many months amid inflation pressures.”
The shipping crisis has now turned into a supply crisis, according to XTB’s research director Kathleen Brooks, as energy infrastructure across the Gulf is a target of Iranian attacks.
“In the last few hours the US embassy in Baghdad has been hit by Iraqi Shia militias, who are aligned with Tehran, the Shah gas field, one of the world’s largest, in the UAE was hit, and a tanker was also hit in the Gulf of Oman,” Brooks noted.
“The conflict seems to be getting bigger, and it is unclear when or how it will end. This is likely to keep the oil price above $100 per barrel for some time.”
US pending home sales surged in February, posting a 1.8% monthly increase, well above expectations for a 0.6% decline and reversing a 1.4% fall in the prior month, according to the National Association of Realtors. The rise suggests continued resilience in the housing market despite higher mortgage rates.
Meanwhile, private-sector job growth slowed. The ADP National Employment Report showed the US added just 9,000 jobs in March, down from 15,500 in the previous week, highlighting ongoing moderation in labor market momentum.
US stocks have opened higher, in line with Europe.
The Dow Jones is up 0.8%, with the S&P 500 and Nasdaq both climbing around 0.7%.
Top risers on the Dow are IBM, Goldman Sachs and American Express, all up just over 2%. Salesforce, Disney and Boeing are next.
Less than 10 of the Dow constituents are in the red, led by Johnson & Johnson and Verizon.
US futures pushed into positive territory on Tuesday as headlines from the Middle East continued to prop up energy prices, while the Federal Reserve begins its two-day policy meeting.
Dow Jones futures were up 0.3%, with the S&P 500 and Nasdaq futures pointing to 0.2% rises, having all previously been down around 0.5-0.6%.
A day earlier, all three major indexes posted gains as investors balanced geopolitical jitters with optimism from tech earnings, with the Nasdaq leading the charge, climbing 269 points or 1.2% to 22,374, the S&P 500 added 1% to reach 6,699, while the Dow Jones rose 388 points or 0.8% to 46,946.
Front-month crude oil prices were remaining elevated, with WTI crude going for $95.60 a barrel.
Earlier today, the United Arab Emirates revealed a drone had struck the Shah upstream oil and gas field, while elsewhere, a tanker was reported to have struck near the port of Fujairah in the Gulf of Oman, and Iraqi officials also said a drone had hit a hotel in Baghdad.
A drone and rocket attack targeting the US embassy was reported in Iraq’s capital, Baghdad, while Israel said it killed the Iranian national security chief, Ali Larijani, in overnight strikes, but some reports suggest he could only be injured.
Financial markets have shown resilience despite concern about rising global energy prices, said market analyst David Morrison at Trade Nation.
He said tech sector sentiment has been supported by optimism around AI after Nvidia’s Jensen Huang said demand for its new chips could reach US$1 trillion, in his opening remarks at the start of its annual four-day GTC developer conference.
“There’s one overarching event which is weighing on sentiment, and which is proving difficult to handicap. The US/Israeli war on Iran has entered its third week. The Trump administration continues to insist that the US is overwhelming its opponent. And yet the Strait of Hormuz remains blocked to traffic, thereby cutting off around a fifth of the world’s supply of oil and liquified natural gas (LNG).”
He noted that President Trump, who just over a week ago rebuffed UK Prime Minister Starmer’s offer of a battleship, saying the war was “already over”, was now demanding European nations and others that benefit from the oil and LNG which passes through the Strait to come and defend it, a call that has been rebuffed,”the argument being that no one asked for this war, and as the US started it, they should finish it”.
As far as financial markets are concerned, Morrison says the ‘risk-off’ sentiment is likely to “prevail for as long as the Strait of Hormuz is blocked”.
Today, US investors will be keeping an eye on earnings from Lululemon, DocuSign and Oklo.
Tomorrow brings the latest update on wholesale inflation, followed by the Fed’s policy decision.